He once was a banker with Goldman Sachs, now Malcolm Turnbull runs the Australian government.
Andrew Meares

by
Dan Zak

Goldman Sachs. The name feels like the bob of a yacht in Biarritz and tastes like the marbling of a Wagyu steak. It sounds like money being moved, invested, tripled, then moved again to avoid taxes and bubbles and crashes. Its headquarters on Lower Manhattan's West Street smells like wealth, from the handsomely kitted-out coffee station on the 11th floor down to the $US5 million ($6.8 million), 168-square metre painting commissioned for its lobby.

Goldman Sachs. Again with Goldman Sachs! Always Goldman Sachs. An alien race could invade Earth, create an economy based on quasars and dark matter, and our new six-eyed overlord would still hire someone from Goldman Sachs.

The investment bank has given Australia its prime minister. It earlier gave George W. Bush one of his treasury secretaries, and Bill Clinton one of his before that.

It was the largest private donor to Barack Obama's 2008 campaign. Throughout 2016, Donald Trump hammered Hillary Clinton for giving paid, closed-door speeches to Goldman Sachs, and he spat its name like it was the embodiment of evil. Goldman Sachs has "total control" over Clinton, he charged again and again.

And now? Trump has plucked his treasury secretary from Goldman. Trump's senior adviser is a former Goldman guy. On Monday, Trump officially named his choice for director of the National Economic Council: the president of Goldman Sachs, Gary Cohn.

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What gives? Why does this white-shoe investment firm always turn up, a tuxedoed stowaway, in the White House?

The Goldman mystique has been honed over 147 years, since the day a German immigrant named Marcus Goldman left the tailoring business to trade debts, via slips of paper he stacked under his silk top hat. Goldman's first office was a block from Wall Street, in a basement, by a coal chute.

'Just enormous'

Now it's a publicly traded behemoth with deep roots in Washington and branches reaching into economies all around the world.

"We've got Goldman Sachs people in every major market," Cohn said in an in-house podcast recorded Monday after his departure for Washington was announced. "You know, you look at the size of our capital, you look at the size of our balance sheet, you look at the size of our people - it's just enormous."

Goldman's omnipresence inspires anxiety in both regulators and conspiracy theorists. It makes it easy to imagine the type of rigged system that both Bernie Sanders and Donald Trump campaigned against.

"Next year, four of the 12 presidents at the regional Federal Reserve Banks will be former executives from one firm: Goldman Sachs," Sanders tweeted a year ago.

Goldman has been a dark punchline as far back as the 1930s, when vaudeville superstar Eddie Cantor - who lost a fortune in a Goldman shell game on the cusp of the Great Depression - worked the firm into his act.

Democratic presidential candidate Hillary Clinton was widely criticised by Donald Trump for having given three undisclosed speeches to Goldman Sachs bankers for $US675,000.
Matt Rourke

"They told me to buy stock for my old age, and it worked perfectly - within six months, I felt like a very old man," Cantor joked onstage, according to Charles Ellis's Goldman history The Partnership.

Cut to 2008, when Goldman made money off the economic collapse by shorting the housing market. The firm was charged with fraud in 2010.

"When you've had a financial calamity like we'd experienced [in 2008], symbolism and symbols become very important - and Goldman is the perfect cultural touchstone of greed and avarice," says author and former Wall Street banker William Cohan, who wrote Money and Power: How Goldman Sachs Came to Rule the World.

In 2012, internal Goldman emails were leaked that suggested its traders referred to clueless investors as "muppets," an unflattering bit of British slang. The comedy site Funny or Die retaliated with a skit featuring three irate Sesame Street-style Muppets who crash a meeting of conniving Goldman executives.

White House National Economic Council director Gary Cohn is eyeing the Australian infrastructure model.
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"Sure we advise them against their own best interests to make us richer, but does that make us bad guys?" asks the actor Kyle MacLachlan, playing a pinstriped executive.

'Yes!' says a Muppet.

Its occasionally dodgy reputation among the public, though, is outweighed by the deference it commands in circles of power. "That's why Trump is going to these Goldman people," Cohan says. "Because it's so easy to claim instant financial respectability by tapping into the Goldman network."

The network.The platinum Rolodex. Rich people who help powerful people get rich, and powerful people who make rich people powerful. It all stems from a culture of backbreaking work and breathtaking exclusivity, to which Goldman recruits are exposed as soon as they walk in the door.

"Those candidates who do not evince a scorching ambition, total commitment, and an inclination for teamwork are quickly weeded out," wrote former Goldman trader Lisa Endlich in her book Goldman Sachs: The Culture of Success.

Everything - individuality, ego, feelings - is subordinate to the firm. "If you say 'I,' you are being abrasive," a veteran partner told Endlich. And yet: "The firm is special, and you are special or you would not be here," she quotes a former vice president as saying.

The legend of Goldman Sachs is such that business blogs chatter obsessively about what it's like to work there: Having a tan means you're not working hard enough . . . Only partners can wear Ferragamo loafers . . . Women are conditioned to avoid makeup and keep their hair pulled back.

"Partners were always looking to see whether an intern had the makings of a 'culture carrier,' Goldman-speak for someone who is able to deal with clients and colleagues in a way that preserves the firm's reputation - one that has made it an incubator for senators, treasury secretaries and central bank governors," wrote Greg Smith, a former executive director, in Why I Left Goldman Sachs: A Wall Street Story.

The reason Trump is stocking his White House with Goldman Sachs is because it's tradition. And who started that tradition?

A short clerk named Sidney Weinberg, who in 1909 lugged an eight-foot flagpole onto the New York subway.

FDR, Clinton, Turnbull

Weinberg - "a dumb, uneducated kid from Brooklyn," he would later call himself - accompanied the pole from Wall Street to the 138th Street home of Paul Sachs, a partner in the firm who wanted it installed there. As the industrious clerk raised the American flag, Sachs told him he should go to night school and perhaps advance from a gopher to something grander.

A gifted networker, Weinberg rocketed up the Goldman ladder and made friends with New York Governor Franklin D. Roosevelt. When his pal moved into the White House, Weinberg helped create the Business Advisory Council, a conduit for corporate execs to nudge and sway the policymakers in the capital.

As a Goldman partner, Weinberg helped ramp up private industry for the war effort during both World War II and the Korean War. He raised money for Dwight D. Eisenhower's campaign and then handpicked his treasury secretary - cementing the notion that our government had much to learn and gain from our financial titans.

"The people that know the industry better than anybody are the people who work in the industry."

That was Hillary Clinton, some 60 years later, at Goldman's headquarters in New York, where she reassured financial titans of this special relationship in one of those pricey speeches that would later give her such grief.

Goldman in mergers (RCA and GE). Goldman in acquisitions (one of the world's largest coffee-bean suppliers). Around 1900, Goldman imported and exported gold across the Atlantic. In the 1950s, it took the Ford Motor Co. public. It has recently invested in Spotify and Uber.

Optimistic about Trump

The firm has expanded its philanthropy in recent years to rehabilitate its image and is considered by some insiders to be one of the more ethical Wall Street firms. Goldman sees the number of top staffers it has sent to Washington as a feather in its cap.

"Throughout its 147-year history, Goldman Sachs has encouraged its employees to give back to the community while they are working here and after they leave," says Jake Siewert, the firm's communications director - and former top aide in the Clinton and Obama administrations, as it happens. "We are proud that many have gone on to serve their country and their communities after they have left."

Turn your gaze up the street from the White House: Weinberg's Business Advisory Council still exists after all these years, under a slightly different name, in a seventh-floor office on Pennsylvania Avenue. Current Goldman CEO Lloyd Blankfein is a member, along with other captains of industry and finance - including ExxonMobil CEO Rex Tillerson, Trump's nominee for secretary of state. (The council's outgoing chairman is Jeffrey Bezos, the found of Amazon and owner of The Washington Post.) In his first year in office, Obama invited the council to the East Room. Early next year, the council will meet in Washington for at least two off-the-record schmooze sessions with lawmakers. President Donald Trump will be at the top of the invitation list.

Despite favouring Clinton, Blankfein is optimistic about Trump.

"He's a very smart guy, a businessman," Blankfein told German newspaper Handelsbatt recently. If his policies "are more stimulative, our fortunes rise along with that."

"You think about, Who is [Apple CEO] Tim Cook going to call in this administration if he has a problem? I think his first thought would be Gary Cohn," says a former Treasury official who's familiar with Cohn's leadership style (and requested anonymity because he was not authorised to speak on the topic). "Who else on that [Trump] team could tell you: How's the Bank of Japan going to react to some announcement you're going to make? At this point, I think he's your only game in town."

In both towns, really. New York and Washington. Since Election Day, stock in Goldman Sachs is up more than 30 per cent.